Frequently Asked Questions
How much, if any, of Langford’s subsidy to the YW/YMCA goes towards funding the other, non-pool related programs that the YMCA runs out of the building? How does Langford avoid subsidizing activities that YW/YMCA programs outside of Langford?
The City pays the subsidy of $1.9 million directly to Westhills to cover the lease costs. It should be noted that since 2016, the YW/YMCA has incurred approximately $10,000,000 in losses without the additional City subsidy, using its own funds to support community recreation in Langford. These losses were offset by funds originally intended for the YW/YMCA’s Greater Victoria community programs, as the YW/YMCA is not nationally funded and cannot draw on external financial resources. Looking forward, the City will ensure that the obligations contained within the existing service agreement are monitored and reported to Council, as appropriate.
If the City owned the building and pays all the operating costs (and there is no rent) what expenses will the “Y” s expense be other than staff and incidentals?
The City’s purchase of the aquatic facility does not alter the original agreements in place. The City will be named in place of Westhills on all agreements, assuming the associated responsibilities. For more detailed information regarding the responsibilities of the landlord and/or tenant, particularly in relation to the YW/YMCA, please see the Colliers Phase 1 Report – Commercial Review of the Lease Agreement.
When has the YW/YMCA indicated that they will default on their obligations?
The City of Langford Committee of the Whole agenda from February 27, 2023, contains an email from the YW/YMCA which reads:
Our Board met yesterday on January 26th and unanimously passed the following resolution: BE IT RESOLVED THAT due to ongoing financial deficits in the operation of the Westhills YMCA/YWCA facility in Langford (hereinafter “WHY”), the Board directs staff to initiate actions toward a facility closure starting March 31, 2023 unless, prior to March 31, 2023, the City of Langford commits to a further annual contribution of $950,000 which contribution shall be in addition to that required under the Services Agreement dated for reference February 7, 2013.
Further to that email, the YW/YMCA has not budgeted for facility lifecycle costs, which are estimated to be 14.8M over the next 17 years.
Why is the City not performing an analysis of the YW/YMCA’s operations before making a decision to purchase the building?
Ownership of the building and operation of the service are two separate issues. Irrespective of who owns the building, the YW/YMCA and the City are parties to a long-term service agreement to operate recreation services. While the City will engage with the YW/YMCA to review options with respect to what services are offered, hours of operation and possible changes, this review is not contingent on the City purchasing the building.
As noted in the December 2nd report to Council, the analysis by Colliers Project Leaders emphasizes the Status Quo – Default Scenario because it is the City’s understanding of how the current arrangement is most likely to evolve if the City does not purchase the building. This scenario was informed by the YW/YMCA’s historical financial performance and their inability to meet current financial obligations, including covering lifecycle costs. While it is possible to speculate on scenarios in which the YW/YMCA achieves improved financial and operational results, these are considered highly uncertain based on available data. The Status Quo – Default Scenario represents the City assuming 100% of the YW/YMCA’s financial lease obligations while the YW/YMCA continues to operate the facility, reflecting the likely financial pressures and outcomes given historical trends and contractual obligations.
Lastly, and as outlined in the December 2nd report to Council, the YW/YMCA, under the service agreement with the City, has sole authority to operate the facility in alignment with their charitable mission. Under the service agreement, all policy and governance matters related to the operation of the facility are the sole responsibility of the YW/YMCA.
The parking lot is split in two by a lane. Are both sides included in the sale?
The City of Langford would receive 186 parking stalls as part of this transaction. Please refer to the map below to show which stalls would be included.
“Why does the Consultant's comparison focus on the Status Quo - Default Scenario and exclude a scenario where the YW/YMCA contributes to lifecycle costs with improved financial performance?"
The Consultant’s analysis emphasizes the Status Quo – Default Scenario because it is the City’s understanding of how the current arrangement is most likely to evolve if the City does not purchase the building. This scenario is informed by the YW/YMCA’s historical financial performance and their inability to meet current financial obligations, including covering lifecycle costs. While it is possible to speculate on scenarios in which the YW/YMCA achieves improved financial and operational results, these are considered highly uncertain based on available data. The Status Quo – Default Scenario represents the City assuming 100% of the YW/YMCA’s financial lease obligations while the YW/YMCA continues to operate the facility, reflecting the likely financial pressures and outcomes given historical trends and contractual obligations.
Key Facts:
1. Public Aquatic Facility Subsidies: Public aquatic facilities typically require local government subsidies and do not operate at a profit. This is consistent with the YW/YMCA’s financial performance since 2016.
2. Documented Service Agreement: The YW/YMCA originally agreed to a subsidy of $750,000– $950,000 per year for 25 years, but operational losses have far exceeded this range. In 2023, the YW/YMCA requested a subsidy that is approximately equivalent to their annual rent obligations ($1.9M) to avoid ceasing operations.
3. Historical Losses: The YW/YMCA has accumulated approximately $10M in operational losses since 2016, indicating revenue shortfalls significant enough to impact their ability to cover lease obligations and lifecycle costs.
4. Lifecycle Costs and Rent Increases: The YW/YMCA has not budgeted for $14.8M in estimated lifecycle costs, which the City expects to cover. Additionally, Westhills has the ability to increase rent under the lease agreement, further escalating the YW/YMCA’s financial burden.
5. City as Financial Guarantor: The City is the financial guarantor for the YW/YMCA’s lease obligations. If the YW/YMCA cannot meet these obligations, the City must step in, particularly if operational deficits continue.
6. Future Risk Assumptions: Based on past financial trends and anticipated increases in rent and lifecycle costs, it is likely that the City will be required to subsidize 100% of the YW/YMCA’s lease obligations under the Status Quo – Default Scenario. This scenario assumes that without such subsidies, the YW/YMCA will cease operations.
7. Focus on Likely Outcomes: While the possibility of improved financial performance by the YW/YMCA exists, the Consultant’s focus on the Status Quo – Default Scenario is based on the most likely trajectory given the historical data and current agreements
“What section(s) of the agreements signed in 2013 validate the statements that were made at the Nov 18, 24, Council meeting... (see box for full question).
“What section(s) of the agreements signed in 2013 validate the statements that were made at the November 18, 2024, Council meeting which have led the public to believe that the City is liable for all the lifecycle costs of the Westhills YW/YMCA Langford Aquatic Facility, regardless of the whether or not the City purchases the facility?”
Under the 2013 Tripartite Agreement, the City’s obligations depend on whether it purchases the facility or continues under the current lease arrangement. If the City does not purchase the facility, the status quo would remain, and the City would continue to provide an annual subsidy to the YW/YMCA. As outlined in Schedule A, Item M of the agreement, this subsidy is meant to support the YW/YMCA’s operating costs, being the annual rent obligations, including base and additional rents. As outlined in Section 3.2 of the agreement, should the YW/YMCA cease operations, the City could be required to take over the lease and its associated obligations. This obligation is also noted by Westhills, who, in the attached letter write, “Westhills ultimately decided to take on the risk of constructing and owning the building using some of its own funds and a significant construction (and later mortgage) loan. We were willing and able to do this only because of the important commitments made by the other parties, [including] the City of Langford agreeing to guarantee the obligations of the YMCA under the lease in the event they became unable to fulfill them.”
In either scenario, the YW/YMCA has stated that they have not budgeted for lifecycle costs, estimated at $14.8M, which are included in operating costs defined under additional rent of the lease agreement. For further insight, Appendix 1 of Colliers’ Phase 1 Report provides a detailed breakdown of the key terms associated with YW/YMCA’s lease obligations and key definitions – See Appendix 3 for Colliers’ Phase 1 Report – Commercial Review of the Lease Agreement.
Key Facts:
1. Contractual Obligation: Under the 2013 Tripartite Agreement, the City must either continue providing subsidies for the YW/YMCA’s rent obligations or take over the lease if the YW/YMCA ceases operations (Section 3.2).
2. Lifecycle Costs: The YW/YMCA’s rent obligations include base and additional rent, which covers lifecycle costs estimated at $14.8M, as defined in the agreements and clarified in Colliers’ Phase 1 Report. 3. Current Expectations: Whether the facility is purchased or not, the City expects to pay for the lifecycle costs as they relate to the YW/YMCA’s lease obligations, as the operator has not budgeted for lifecycle costs or proven they can meet their financial obligations associated with the lease.
“Why is the decision timeline to accept the offer to sell so quick, and who is imposing it? Are there multiple offers driving this urgency?"
The timeline for deciding on the offer to sell is influenced primarily by the length of discussions/ negotiations between the City and Westhills from spring of 2023 to present. Westhills has extended its preferred timelines for the offer to sell multiple times to allow the City to complete its due diligence and provide opportunities for public input. In the letter attached, Westhills writes: “normally an offer such as this would be open for 2 - 3 weeks however discussions with City staff indicated that leaving it open for a longer period of time would allow the City to provide its due diligence information to the public and Council and receive feedback prior to making a decision. As a result, the offer was left open to December 17th… We have been patient to date however we are looking forward to the City soon deciding whether it will purchase the recreation centre or not. If the City decides not to purchase or is unable to make a decision prior to the offer expiration date we will need to explore other options for the facility. This may not necessarily preclude discussions with the City at a later date, but we would not be able to guarantee that the price and other terms contained in the current offer would remain the same in the future.”
While the City understands that other parties have expressed interest in the property, it is not privy to specific details about these inquiries.
Key Facts:
1. Timeline set by Westhills: The decision timeline has been extended multiple times, with extensions previously being granted for due diligence and public input.
2. Potential Interest from Other Entities: The City understands that
“Is there a path by which West Shore Parks and Recreation Society (WSPR) could be hired to operate the aquatic centre?”
While the five West Shore municipalities (City of Langford, City of Colwood, Town of View Royal, District of Highlands, District of Metchosin) currently collaborate on some recreation services through the West Shore Parks and Recreation Society (WSPR), there has not been a precedent for collaborative planning of new recreation facilities. However, recent discussions among the West Shore communities suggest a shared interest in planning future recreation facilities collaboratively to ensure sufficient and well placed amenities while avoiding duplication (see November 18, 2024, staff report for further information).
The City acknowledges the importance of ongoing discussions regarding the operator and operations of the aquatic facility. However, any considerations or potential decisions in this regard will be addressed at a later date, following the completion of the current purchase decision process. The City remains committed to carefully reviewing all options and will ensure that any decisions made will be in the best interest of the community and its long-term recreational needs.
Key Facts:
1. Current Collaboration: West Shore municipalities collaborate on recreation services through WSPR but have not historically planned new facilities collaboratively.
2. Growing Consensus for Collaboration: Recent discussions indicate consensus on the need for collaborative planning to ensure adequate, strategically located recreation facilities and to avoid duplication. WSPR has issued an RFP for a West Shore Recreation Master Plan – See the WSPR update from October 28, 2024 here: West Shore Parks & Recreation Society Seeks Consultant for Recreation Master Plan | West Shore Parks & Recreation. The City anticipates that this work will set the necessary foundation for future conversations about appropriate cost share and/or ownership arrangements of facilities within the West Shore.
3. Subsequent Operational Review: Operational considerations for the aquatic centre, including potential involvement of WSPR, may be reviewed after the purchase decision is made.
“Why doesn’t Langford start by enforcing the provisions of the contract with the YMCA?”
This question was addressed in the City Staff Report to Council on November 18th, 2024. Please refer to the question, “Given the City has had to increase its financial support to the YW/YMCA, does the City have any recourse?”
“What due diligence did the City do before guaranteeing the YW/YMCA’s obligations to Westhihlls? What was Council’s vision for entering into what would appear to be a lopsided agreement?”
The City entered into the agreement to facilitate the development of the aquatic facility without incurring the significant upfront costs of construction. By entering these agreements, the City secured access to valuable recreational services for the community for 25 years, with Westhills financing and constructing the facility. This approach allowed the City to spread costs over time through a nominal annual subsidy to the YW/YMCA.
The City cannot definitively speak to the due diligence process leading to the approval of this deal in 2013. Due to many contributing factors, the YW/YMCA currently requires subsidies approximating their annual lease obligations. These increased requirements have outgrown the City's original subsidy expectations, creating the perception of a lopsided agreement. Today, the City’s focus remains on addressing the realities of the agreement and balancing the City’s financial obligations with the need to provide these critical services.
Key Facts:
1. Agreement Purpose: The agreements provided the City the opportunity to avoid upfront costs of construction, while securing long-term recreational benefits for the community.
2. Financial Commitment: The City agreed to provide an annual subsidy to the YW/YMCA, initially expected to be less than the annual rent, to secure 25 years of recreational services.
3. Current Challenge & Focus: The YW/YMCA now requires a subsidy approximately equal to their annual rent obligations, and the City is focused on managing these fiscal challenges while continuing to provide services.
“What was the City’s plan if or when the current situation occurred?”
The City recognizes that questions have arisen regarding the decisions and considerations when the agreements were entered into in 2013. The City’s focus is to address the current situation and manage the obligations in place to ensure continued service to the community.
“If the City purchases the facility, will Langford residents get a reduced rate?”
Langford residents receive a 10% discount on the monthly memberships and a 20% reduction on drop-in fees through the YW/YMCA. The City expects discounts to remain available to Langford residents
“If the City purchases the facility, is there an official commitment from the City of Langford that this location will not be sold to meet needs that do not serve public interest?”
Local governments, by their very nature, exist to serve the public interest. Therefore, any related or future decisions regarding this facility and associated parking will be made to maximize public interest, as determined at the time of that decision.
“If the City purchases the facility, what impact does this have on the average annual household taxes? How are they calculated?”
In 2024, a representative house in Langford paid $2,406 in general municipal property taxes (note this is just the City’s portion of the tax bill). Applying the 1.75%, this amount increases to $2,448, which results in a $42 net increase.
“If the City purchases the facility, will free parking still be available for those accessing the public dock on Langford Lake near the YW/YMCA?”
As part of the City’s due diligence, the City commissioned a parking study by WATT consulting which assessed a variety of competing current and future parking needs of the parking lot. This study determined that all parking needs can be met by the City receiving 186 parking stalls as part of the transaction. As such, the City is not contemplating charging for parking.
“Why has the YW/YMCA not regained the level of membership they had pre-covid?”
The City understands the concern regarding membership levels at the aquatic facility and recognizes the impact of this issue. However, as outlined in the service agreement with the YW/YMCA, they have sole authority to operate the facility in alignment with their charitable mission. All policy and governance matters related to the operation of the facility are the responsibility of the YW/YMCA. While the City can offer speculation on factors that may be affecting membership levels, these issues would need to be thoroughly examined as part of an operational review. The City remains committed to working with the YW/YMCA to ensure the continued success of the facility for the community.
Key Facts:
1. Operational Responsibility: The YW/YMCA has sole authority to manage the aquatic facility in alignment with its charitable mission, as per the service agreement.
2. Governance Responsibility: Policy and governance decisions for the facility are the responsibility of the YW/YMCA under the service agreement.
3. Current Focus: While the City can speculate on potential reasons, current performance would be part of the planned operational review.
“Is there an opportunity for the City of Langford to take any cost-cutting measures or operational changes to mitigate further operating losses?”
The City acknowledges the importance of ongoing discussions regarding the operator and operations of the aquatic facility. For clarity, the current operator will remain in place. Any considerations or potential decisions regarding the operator and operations will be addressed at a later date, following the completion of the current purchase decision process. The City remains committed to determining how best to review operational concerns and will ensure that any decisions made will be in the best interest of the community and its long-term recreational needs.
“If the City purchases the building, what will be the nature of the agreement with the YMCA (or any other operator) be?”
The current agreements will remain in place.
“Are there any other ongoing annual payments from the City to the YW/YMCA?”
No, the City only provides the annual subsidy. This is currently $1.9M.
“What obligations is the City taking on through this purchase?”
The City’s purchase of the aquatic facility does not alter the original agreements in place. The City will be named in place of Westhills on all tenancy agreements, assuming the associated responsibilities. For more detailed information regarding the responsibilities of the landlord and/or tenant, particularly in relation to the YW/YMCA, please see Appendix 3 for the Colliers Phase 1 Report – Commercial Review of the Lease Agreement.
“Is Langford on the hook for the operating losses?”
The City is not responsible for past operating losses of the YW/YMCA. However, under the 2013 Tripartite Agreement, the City is financially backstopping the YW/YMCA’s lease obligations under Status Quo – Default Scenario, as outlined elsewhere in this report and supporting documentation.
“What year does the 2013 Tripartite Agreement Expire?”
As per schedule A of the Tripartite Agreement, Item V: “the term means 25 years, commencing on the day that is two months after the completion date and expiring on the 25th anniversary of that date unless this agreement is earlier terminated in accordance with the provisions of this agreement”. The City understands that if the agreement is not earlier terminated in accordance with the provisions of this agreement, the expiration year of this agreement is 2041.
“Why would Langford entertain losing so much money over the next 42 years. Is there a point in which Langford could withdraw from the Agreements?”
The three agreements expire together, 25 years after the commencement of the lease and service agreement. While there may be certain provisions for earlier termination, the City cannot effectively withdraw from the Agreements until 2041.
How did the City contractually double its subsidy to the YW/YMCA in 2023? Did the City amend the Service Agreement with the YW/YMCA?
The City has not amended the Service Agreement with the YW/YMCA as it relates to the increase in subsidy. Rather, following Council’s direction in 2023 to increase the subsidy, the City, YW/YMCA and Westhills collectively agreed that the City’s increased subsidy would be paid directly to Westhills as a payment towards the lease/rent owing.
“Why didn’t the City or the YW/YMCA buy the Aquatic Center in 2022?”
The City did not proceed with the purchase of the Westhills YW/YMCA Langford Aquatic Centre in 2022 because no directive was issued by City Council to initiate the transaction. A purchase by the YW/YMCA would have had to be a decision by the YW/YMCA’s board with the agreement of Westhills. Each of these entities is an independent corporate body with the autonomy to make their own decisions. The City is unable to impose any agreements on the independent parties of Westhills and the YW/YMCA. The facility remains independent of City ownership as the parties involved operate autonomously from City jurisdiction.
Key Facts:
1. Council’s Role: No directive or authorization was provided by City Council to purchase the Facility in 2022.
2. Independence of Parties: The City cannot compel independent parties into any arrangement, this would be contrary to their autonomy in decision-making.
3. Decision Criteria: Without Council’s directive and given the City’s respect for the independence of involved parties, the acquisition was not pursued.
“Why is this the first time this has come forward?”
This is not the first time the City has considered this issue. Discussions around additional subsidies and the financial analysis of a buy-versus-lease option began during the 2023 budget discussions. Given the Page 274 of 444 Westhills YW/YMCA Langford Aquatic Centre 20241118 Council Report Page 3 of 7 complexity of the transaction, the City prioritized thorough due diligence, including comprehensive legal, maintenance, and financial reviews. With these reviews now complete, the City is confident in the preliminary findings and are releasing the reports to the public for review and feedback prior to a final decision scheduled for December.
Key Facts:
1. Previous Discussions: The City began considering additional subsidies and exploring buy-versus lease options during the 2023 budget discussions.
2. Due Diligence: The City prioritized a thorough review process, recognizing the legal, financial, and maintenance complexities and risks involved in a purchase.
3. Public Review Process: Now that due diligence is complete, reports are being shared with the public for input ahead of a final decision in December.
“Is the Sale Price of $35,000,000 a Fair Deal to the City?”
The City considers the $35,000,000 sale price for the facility to be fair based on comprehensive negotiations and careful review of multiple valuation factors. Since the beginning of discussions, various purchase price points have been analyzed to ensure a balanced agreement. The building’s insured replacement value, provided by Westhills, is $44,888,700 which supports the fairness of the sale price. Additionally, the 2024 Assessment provided by BC Assessment has valued the property (excluding the 186 stall parking lot) at $35,146,000, aligning with the sale price and further affirming its market appropriateness.
Key Facts:
1. Negotiated Terms: The City has actively negotiated with the owner to reach terms it believes are fair and favorable.
2. Replacement and Assessed Value: The owner’s stated that the insured 2024 replacement value of the building is $44,888,700, and the 2024 BC Assessment assessed value is $35,146,000 (both numbers exclude the 186 stall parking lot).
3. Price Review: The City has reviewed multiple price points throughout negotiations, confirming the appropriateness of the current $35,000,000 offer.
“Why is Council Not Considering a Referendum or an Alternative Approval Process?”
During the 2023 budget process, Council approved the short-term loan approach for the facility purchase due to the benefits associated with this model. Specifically, a short-term loan is projected to save the City approximately $7,500,000 in interest costs compared to a 20-year loan, offering substantial financial savings. Further, a short-term loan allows the City to build financial capacity for asset management once the short-term loan is paid off; this approach is expected to result in approximately $7,600,000 in available capacity for asset management initiatives after 2029. In addition to these financial considerations, if the City does not consider the offer to purchase by December 17th , there is no certainty that the terms will remain the same in the future.
Key Facts:
1. Loan Option Approved: Council approved the short-term loan option in 2023 as a fiscally responsible approach to fund the facility purchase.
2. Interest Savings: A short-term loan is anticipated to save approximately $7,500,000 in interest when compared to a longer-term, 20-year loan. Page 275 of 444 Westhills YW/YMCA Langford Aquatic Centre 20241118 Council Report Page 4 of 7
3. Tax and Asset Management Benefits: The short-term loan approach will allow the City to plan for asset management, amounting to about $7,600,000 annually after 2029, without additional taxes.
“Have Other Community Centre Operators Been Comparatively Reviewed?”
The City has considered the operational costs of alternative aquatic facility models, under both lease and purchase scenarios, as detailed in the attached Phase 2 report by Colliers - See Appendix 2. However, given that the City is contractually obligated to guarantee the financial obligations of the lease regardless of the service operator, questions related to operations of the facility will be considered at a later date.
Key Facts:
1. Alternative Operator Costs Reviewed: The City analyzed costs of a different operator under both leasing and buying arrangements, as documented in the Phase 2 report by Colliers.
2. Primary Focus: The current operator remains, regardless of the decision to purchase or not.
3. Simplification of Process: Deferring the consideration of alternative operator scenarios allows for a streamlined purchase decision, with discussions of an operational nature planned for a later date.
“Can the City Cost Share this Facility with Local Municipalities?”
While the five West Shore municipalities (City of Langford, City of Colwood, Town of View Royal, District of Highlands, District of Metchosin) currently collaborate on certain recreation services through the West Shore Parks and Recreation (WSPR) Society, there has not been a history of collaborative planning for new recreation facilities within the region. However, recent discussions among the West Shore communities indicate a broad consensus that future recreation facilities should be planned collaboratively to ensure that the West Shore has adequate and appropriately located facilities, avoiding unnecessary duplication. To this end, WSPR has issued an RFP for a West Shore Recreation Master Plan – See the WSPR update from October 28, 2024 here: West Shore Parks & Recreation Society Seeks Consultant for Recreation Master Plan | West Shore Parks & Recreation. The City anticipates that this work will set the necessary foundation for future conversations about appropriate cost share and/or ownership arrangements of facilities within the West Shore.
Key Facts:
1. Current Collaboration: The five West Shore municipalities currently share some recreation services through the WSPR but have not collaborated on other new recreation facility planning to date.
2. Growing Consensus for Collaboration: Recent discussions among West Shore communities have led to agreement on the need for a collaborative approach to new recreation facility planning, to ensure adequate and efficiently located facilities.
3. Unified Service Area: West Shore residents often use facilities across municipal boundaries, reinforcing the need for region-wide planning.
4. Proposed Plan: WSPR has initiated a Recreation Master Plan process, which will guide future facility development and service delivery discussions, and set the foundation for discussions related to cost share and/or ownership arrangements.
“Does the YW/YMCA Pay Property Taxes?”
The YW/YMCA does not pay municipal tax via a tax exemption.
“The YW/YMCA has funds—why are we subsidizing them?”
The City’s subsidy to the YW/YMCA is essential to maintain public access to the aquatics facility, as any similar facility in the City would require ongoing subsidies to operate. Subsidies for the YW/YMCA were always expected and formed a core term of the original 2016 agreement. While the YW/YMCA has reserve funds, the City understands that these are primarily earmarked for regional projects throughout Greater Victoria, rather than for this facility. The YW/YMCA has had to draw significantly from these reserves to cover substantial operating losses in Langford. Without the City’s additional subsidy, the YW/YMCA may have been forced to cease operations, which would leave the City with lease obligations but without a recreation provider to serve the community.
Key Facts:
1. Subsidy Necessity: Operating public aquatics centers generally requires subsidies, and any similar facility would likely need comparable or higher financial support.
2. YW/YMCA’s Reserves Purpose: The YW/YMCA’s reserve funds are intended for reinvestment in other initiatives, not for sustaining this facility’s operations.
3. Risk of Ceased Operations: In the absence of additional City subsidies, the operator may have had to cease operations, leaving the City with lease responsibilities but without a community recreation provider.
“Given the City has had to increase its financial support to the YW/YMCA, does the City have any recourse?”
Public pools generally require subsidies and are not expected to operate profitably. Since 2016, the YW/YMCA has incurred approximately $10,000,000 in losses without the additional City subsidy, using its own funds to support community recreation in Langford. These losses were offset by funds originally intended for the YW/YMCA’s Greater Victoria community programs, as the YW/YMCA is not nationally funded and cannot draw on external financial resources. Any action by the City to recover costs or seek recourse would likely impact other community programs provided by the YW/YMCA, such as Camp Thunderbird, Young Moms Program and Pandora Youth Apartments, as well as childcare operations. Furthermore, multiple agreements were established to secure the facility’s long-term operation, including a 25-year service agreement and a tripartite agreement with Westhills. The tripartite agreement ensures continuity by requiring the City to rent the facility on a month-to-month basis if the service provider is unable to meet its obligations of the lease agreement. These arrangements were intended to provide operational stability, as detailed in the attached Phase 1 report by Colliers - See Appendix 3
Key Facts:
1. Expected Subsidies: Public aquatics facilities generally require local government subsidies to operate; profitability was not expected.
2. Operator’s Financial Losses: Since 2016, the YW/YMCA has incurred $10,000,000 in losses for facility operations, without the additional subsidy from the City, by diverting funds intended for other Greater Victoria community programs. Page 277 of 444 Westhills YW/YMCA Langford Aquatic Centre 20241118 Council Report Page 6 of 7
3. Non-profit Limitations: The operator is not financially supported at the national level, and its community programs may be at risk if the City pursued recourse.
4. Long-term Agreements: The facility’s operation is governed by a 25-year service agreement and a tripartite agreement that ensures continuity of service, requiring the City to cover costs if the service provider is not able to.
“Did The City Look at The Financials of the YW/YMCA?”
The City has reviewed the YW/YMCA’s financial records for the facility dating back to the start of operations in 2016. Membership revenue has not yet returned to pre-pandemic levels, with 2023 revenue at $2,617,969, which is 65% of the 2019 peak of $4,013,267. Even in 2019, when no additional City subsidy was provided, the YW/YMCA incurred a loss of $867,666, effectively subsidizing the facility for that amount. Since 2016, the YW/YMCA has covered a cumulative loss of approximately $10,000,000, effectively offsetting costs for Langford residents and facility users. Mid-year financials from 2024 show a surplus of $188,771, but additional City support remains necessary as membership levels have not fully rebounded. Any mid-year surplus may be absorbed by year-end operating costs. Further, lease terms could allow for an increase in rent under the lease agreement. Following a decision to purchase the facility or not, the City will review the service agreement with the YW/YMCA (and associated subsidies), as public feedback indicates the importance of potential service enhancements – See Appendix 4 for YW/YMCA 2016 – 2023 and 2024 Interim Consolidated Income Statements.
Key Facts:
1. Comprehensive Financial Review: The City has reviewed the YW/YMCA’s financials for the facility since operations began in 2016.
2. Membership Revenue Decline and Recovery: Membership revenues have been steadily increasing post 2020, though they remain below 2019 levels; 2023 revenue reached 65% of pre-pandemic levels.
3. Cumulative Financial Losses: From 2016 to 2023, the YW/YMCA absorbed approximately $10,000,000 in losses, effectively providing a subsidy for community recreational services.
4. 2024 Financial Status: The first half of 2024 shows a profit of $188,771, indicating a recovery path to pre-COVID levels, but the additional City subsidy remains necessary at this time.
5. Future Surplus Considerations: Any potential surplus not used to enhance services could be absorbed by rent increases allowable under the lease, as rent is currently below allowable rates.
6. Operations Review: The City will review operations / service levels at the facility, once a decision to purchase the facility or not has been made by Council.